TOKYO -- Singapore's Grab is well-aware of the growing pressure on global startups to turn a profit, but the ride hailer turned do-it-all super app believes making a positive social impact is just as crucial, co-founder Tan Hooi Ling said in an interview on Oct. 29.
From the get-go, Grab embraced the principle of a "double bottom line," Tan said -- a concept that tries to measure conventional earnings as well as the social contributions a company makes.
The earning potential of multibillion-dollar tech startups like Grab is under greater scrutiny, especially after the WeWork fiasco, but "this concept of a path to profitability, having very sound unit economics, it is not that new to us," she stressed on the sidelines of the Nikkei Global Management Forum in Tokyo. "It is what we started seven years ago thinking about."
Grab's "more mature businesses in more mature markets," she said, are already profitable.
Years ago, Tan Hooi Ling and co-founder Anthony Tan -- who are not related -- attended Harvard Business School together and took a class called Business at the Base of the Pyramid. It looked at how companies can help to improve the lives of low-income individuals and households in developing countries.
"We realized ... that you could build sustainable businesses that were profitable, as well as businesses that had double bottom lines, that created social economic impact and value to the customers that we are serving," she said.
In its first social impact report, published in September, Grab claims to have contributed $5.8 billion to the Southeast Asian economy in the 12 months leading up to March 2019. The report notes that 21% of its drivers did not work prior to joining Grab, and that the company has helped 1.7 million micro-entrepreneurs open their first bank accounts since 2012.
"[Business] needs to be sustainable financially, [and] it needs to add back values in different ways, not just financial values," Hooi Ling Tan said. "If we can continue finding more business opportunities like that, it will always be a win-win for all."
Since its start as a ride-hailing app, Grab has expanded its services to offer everything from rides and food deliveries to e-payments. Along the way, Tan said it has never lost sight of profitability.
"Before we invest into any new businesses, it needs to have two things: sound unit economics and a clear path to profitability. Then we decide to invest, then we decide if it is the right time to grow," endeavoring to balance growth and sustainability.
Tan said Grab reached $1 billion in revenue last year and is on track to double that this year.
The company is one of the few Southeast Asian "decacorns" -- private enterprises valued at more than $10 billion. Accoring to CB Insights, it is worth $14.3 billion, the largest in the region.
The company is backed by Japan's SoftBank Group. And though investors are casting a wary eye on startups funded by the Japanese conglomerate after high-profile troubles at two of its portfolio companies -- U.S. ride hailer Uber Technologies, which flopped in its initial public offering, and WeWork, which put off its IPO as troubles mounted over its finances and management -- Tan said Grab is having no difficulty finding potential investors.
"As of today," she said, "we are still getting investor interest."